Choosing deductibles and limits that match your risk

Deductibles and limits determine how much you pay during a loss and how much your insurer covers. Choose them with both monthly budget and worst-case costs in mind.

Deductible basics

The deductible is the amount you pay out of pocket before collision or comprehensive coverage pays. Higher deductibles lower premiums but increase your expense if you have a claim.

Policy limits

Limits are the maximum the insurer will pay for a covered loss. For liability coverage, limits are often expressed as split limits (per person / per accident / property damage) or as a single combined limit. Higher limits reduce the risk you'll be personally responsible for large judgments.

How to choose

• Estimate what you could comfortably pay after an accident — that helps set a deductible.
• Compare the premium savings of raising the deductible against the added financial exposure.
• Consider higher liability limits if you have significant assets to protect.

Other tips

Review roadside assistance and rental coverage options separately — they often have small additional costs but provide convenience. Revisit your choices annually or after major life changes (new car, move, change in commute).